Regulatory Alerts2019-06-26
Regulation (NAP) on the Adequacy of Own Funds and Solvency Ratio for Microfinance Institutions
The Central Bank of São Tomé and Príncipe issued this Permanent Application Standard (NAP) to establish the regulatory framework for the adequacy of own funds and solvency ratios for authorized microfinance institutions (MFIs). It mandates that MFIs maintain qualified own funds equal to or exceeding minimum authorized capital, calculate a solvency ratio of at least 20% using specified risk-weighted asset formulas, and submit periodic financial reports to the Central Bank. The regulation further defines base and supplementary own funds components, outlines risk-weighting coefficients for balance sheet and off-balance sheet items, and grants the Central Bank authority to require additional capital or correct calculations when prudential conditions are not met.